COMMISSIONER OF CUSTOMS, BANGALORE versus M/S SPICE TELECOM, BANGALORE

Citation: [2006] SUPP. 7 S.C.R. 545 · Decided: 19-10-2006 · Supreme Court of India · Bench: ASHOK BHAN · Disposal: Dismissed

Judgment (excerpt)

COMMISSIONER OF CUSTOMS, BANGALORE 
A 
le 
M/S SPICE TELECOM, BANGALORE 
OCTOBER 19, 2006 
[ASHOK BHAN, AL TAMAS KABIR AND DAL VEER BHANDARI, JJ.] 
B 
Customs Act, 1962-s.25-Exemplion Notification No.11197 as amended 
by Notification No.51197-Entitlement of, to Radio terminals imported by 
Respondent-assessee-Held, entitled as they are solely used with Base C 
Transceiver Station (BTS) and qualify as 'ancillary equipment' of BTS-They 
are not independent equipment having independent function-Also cannot 
be termed as a general purpose radio equipment, being specially designed 
to support Mobile Communication Network in particular GSM 
The Respondent's case is that the Radio Terminals imported by it are D 
Base Transceiver Station (BTS) ancillary equipments, essential for providing 
connectivity for use of cellular phones and hence they are entitled to benefit 
of Exemption Notification No.11/97; Dated 1-3-1997, as amended by 
Notification No.51197 dated 2-6-1997. 
Revenue denied the claim of Respondent on the ground that the Radio E 
Terminals are independent equipment having independent entity and function 
and are not ancillary equipments of BTS and are hence not covered under the 
said Exemption Notification. 
Tribunal granted benefit of the Exemption Notification to Respondent. 
Hence the present appeal by the Revenue. 
F 
Dismissing the appeal, the Court 
HELD: I. I. In order to have inter-connectivity Radio terminals are a 
must. The technical literature produced indicates that the radio terminal and 
antennas as ancillary equipment. It "aids and attends" to discharge the G 
functions it is meant to discharge. The Authority in Original as well as the 
Commissioner (Appeals) have held that radio terminals are part of BTS 
therefore they are not eligible for exemption. Upholding the said view would 
amount to reading 'BTS components' in the notification instead of 'BTS 
545 
H 
546 
SUPREME COURT REPORTS (2006] SUPP. 7 S.C.R. 
A ancillary equipment' which is not permissible under law.1551-DI 
1.2. The technical literature submitted makes it clear that the radio 
terminals transport the already converted digital speech from BTS equipment 
to the BSC (Base Station Control) through the outdoor units and antennas. It 
demonstrates that these radio terminals are solely and principally used ,with 
B the BTS and therefore they rightly qualify as BTS ancillary equipments to 
be eligible to the benefit of Notification No. 11/97 dated 1.3.1997 as amended 
by Notification No. 51197 dated 2.6.1997. Radio terminal is not independent 
equipment having its own independent function. lt cannot be termed as a 
general purpose radio equipment as the technical literature clearly indicates 
C that this is specially designed to support Mobile Communication Network in 
particular GSM. The literature makes it abundantly clear that the radio 
terminal is not a stand alone equipment and cannot function at all, on its own, 
as contended by the Revenue.1551-E-Gl 
P. Ramanatha A1yar 's Law Lexicon and Stroud's Judicial Dictionary, 
D referred to. 
Vareed Jacob v. Sosamma Geevarghese, (200416 SCC 378, referred to. 
2. The subsequent Notification No.21/2002 dated 1-3-2002 defines the 
scope of ancillary equipment for BTS by restricting the entry to only three 
E equipments. Radio Terminals in this notification have not been considered as 
ancillary equipment of BTS. Relying upon the said Notification No.21/2002, 
Revenue contended that the same is clarificatory in nature and would be 
applicable to the Radio Terminals imported by the respondent in the year 1998 
as well. But this contention is without substance. The subsequent notification 
F 
which defines the scope of ancillary equipment is effective only from 1.3.2002 
and does not have retrospective effect. Respondent's clearance pertains to July, 
1998 and the Notification No. 21/2002 has come into effect with effect from 
1.3.2002. It would not apply to the goods which have already been cleared. 
Notification No. 21/2002 cannot be given retrospective effect. In the absence 
of any express provision contained in the notification ordinarily it cannot be 
G presumed that the same is retrospective in nature. Revenue has failed to show 
that the subsequent notification is clarificatory in nature. Incidentally, with 
regard to the identical goods imported through Delhi, wherein the items were 
classified under the same heading, Delhi Customs House extended the benefit 
of the said notification

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